Credits vs. Repairs After Home Inspection: A Seller’s Guide to Handling Repair Requests

What Are Repairs vs. Credits?

Repairs: You fix issues discovered during the inspection contingency. These must typically be completed by licensed contractors and verified before closing.

Credits: Instead of making repairs, you provide the buyer money — usually toward closing costs — allowing them to handle the work after closing.

Buyers typically submit repair requests using an Inspection Repair Request Clause.

For a general overview of who pays for inspections and repairs, see: Who Pays for Home Inspections & Repairs?

When Sellers Should Make Repairs

You should lean toward repairs when:

• The buyer’s loan (FHA, VA, USDA) requires specific repairs.
• The repair is simple, inexpensive, or safety-related.
• The buyer insists on having the issue fixed before closing.
• Contractors are available and work can be completed quickly.

Repairs can help keep a nervous buyer from walking away.

When Sellers Should Offer Credits Instead

Credits are often the better option when:

• Repairs are expensive or time-consuming.
• The buyer wants to use their own contractor.
• You want a faster, cleaner closing without contractor delays.
• The buyer plans renovations and will redo the repairs anyway.

Credits reduce stress, avoid scheduling issues, and keep your sale moving smoothly.

How Credits Work at Closing

Seller credits can be applied toward:

• Buyer closing costs (most common)
• Prepaids such as taxes or insurance
• Price reductions when lender rules limit credits

Lenders limit seller credits based on loan type. Confirm early with the buyer’s lender to avoid surprises.

All agreements must be recorded in a purchase addendum.

How Repairs Work Before Closing

If you decide to make repairs before closing, follow these steps:

• Use licensed contractors for all work.
• Save receipts, invoices, and photos for documentation.
• Complete repairs before the final walk-through.
• Disclose all repairs in writing using an addendum.
• Prepare for possible re-inspection if required.

Repairs must be fully completed before closing.

Negotiating Credits vs. Repairs

Effective negotiation includes:

• Reviewing the inspection report thoroughly.
• Fixing only material defects, not cosmetic issues.
• Offering credits for large or uncertain repairs.
• Bundling multiple items into one credit amount.
• Documenting all agreements in writing.

Most FSBO transactions resolve inspection issues with credits, not repairs.

Risks of Repairs vs. Credits

Risks of repairs:

• Contractor delays may push back closing.
• Costs may be higher than expected.
• Buyers may request a second inspection.

Risks of credits:

• Lenders may cap or deny the credit.
• Credits cannot fix items impacting loan approval.
• Buyers may still ask for minor repairs before closing.

Which Option Is Best for FSBO Sellers?

Most FSBO sellers prefer credits because they:

• Speed up the closing timeline
• Avoid coordinating contractor schedules
• Reduce negotiation friction
• Give buyers more control over repairs

However, safety issues or lender-required repairs may still need to be completed.

Related FSBO Resources

• Important Repairs to Make Before Listing Your House
• Repair Requests
• Inspection Contingency
• Repair Request Clause
• Final Walk-Through
• Purchase Addendum
• FSBO Contract Guide